Although the UWG serves to protect consumers, consumers have so far had no direct claims of their own under the UWG. This has now changed. In addition, the regulatory offense section of the UWG has been amended and the relevant “blacklist” has been updated.
What are the requirements for compensation?
Section 9 para. 2 UWG is short and easy to understand:
“Anyone who intentionally or negligently carries out a commercial act that is not permitted under Section 3 and thereby causes consumers to make a commercial decision that they would not otherwise have made is obliged to compensate them for the resulting damage. This shall not apply to unfair commercial practices in accordance with Sections 3a, 4 and 6 and No. 32 of the Annex.”
If there is a breach of specific standards, for example Section 5a UWG (see here for the obligations of influencers), the consumer can claim compensation if they were induced to make a business decision that they would not otherwise have made. The infringer must be at fault for the commercial (initial) action, i.e. have acted intentionally or negligently.
With regard to the burden of proof, the principles for civil law claims apply: the party asserting a claim must also set out and prove its requirements. This could be problematic, particularly with regard to the existence of causal damage.
Who is liable for damages?
In accordance with the wording of Section 9 para. 2 UWG, the party carrying out the unlawful commercial act is liable for damages. This does not necessarily have to be the manufacturer of a product. It is conceivable that all participants in a supply chain and also advertising companies may be liable for damages.
General civil law can be used to answer the question of what is covered by the compensation. Accordingly, Section 249 BGB applies, i.e. the so-called in rem restitution. It states that the condition that would exist if the circumstance requiring compensation had not occurred must be restored.
The consumer must therefore show that they would not have taken an economic decision without the unfair commercial practice. If, for example, the economic decision is to conclude a purchase contract, compensation may consist of the consumer being able to withdraw from the contract. In addition, services rendered (e.g. money paid) can also be reclaimed.
At this point, it is interesting to take a look at the regulations on influencer advertising. A consumer has already made a business decision if they click on a link to a store website via a tap tag. However, this commercial decision will generally not constitute direct damage that is eligible for compensation. The situation without this commercial act does not differ from the situation with the commercial act.
When is there a (parallel) threat of a fine?
The fines under the UWG are regulated in § 19 para. 1 UWG, according to which anyone who intentionally or negligently infringes consumer interests contrary to § 5c para. 1 UWG violates consumer interests. Section 5c para. 2 UWG covers a whole range of unfair commercial acts. In this respect, this is similar to the catalog of unfair business practices listed in Section 9 para. 2 UWG.
The amount of the potential fines is regulated in Section 19 para. 2 UWG. They can reach values of up to €50,000 or up to 4% of annual turnover and therefore represent a very painful loss. If a fine is calculated on the basis of annual turnover, this only applies to companies with an annual turnover of more than €1.25 million.
The black clauses
A violation of Section 5c UWG, which is subject to a fine, can be found in the fact that a commercial act is carried out in accordance with the list of black clauses. This list is an annex to Section 3 para. 3 UWG, which already existed before the amendment. In principle, this list includes both misleading and aggressive commercial acts. Within the amendment, the list of black clauses was adapted both in terms of content and readability.
The significance of damages and fines in practice
With the new means available to consumers in particular in the form of direct claims for damages under the UWG, but also the tightening of fines, unfair business practices are becoming increasingly economically threatening in terms of their potential economic consequences. This is in line with the legislative objectives at European and national level, which aim to give unfair competition law tougher teeth.
Focus on competition law
In our focus topic “Requirements in competition law“, we look at the changes resulting from the latest amendment to the UWG and present the challenges for companies and entrepreneurs. So far, this series has included an overview of consumer compensation and fines regulations, influencer case law and the associated changes to the UWG (also) for influencers, necessary adjustments in e-commerce and restrictions on the sale of dual quality products.